Entering text into the input field will update the search result below

Some Steel Sector Indicators

Econbrowser profile picture

Editor's note: This article was originally published on March 6, 2018, by Menzie Chinn here.

Which should give you pause for thought about national security-rationalized tariffs. Output stable, real prices up.

Figure 1: Raw steel production, 2012=100, Seasonally Adjusted (blue, left log scale), and Producer Price Index for Cold Rolled Steel Sheet and Strip, Jun 1982=100, Monthly, Not Seasonally Adjusted deflated by CPI less food and energy, seasonally adjusted (red, right log scale). NBER-defined recession dates shaded gray. Source: Federal Reserve Board and BLS via FRED, NBER, and author's calculations.

The recovery has been driven in part by already implemented trade measures (anti-dumping, safeguard), so not asserting that we shouldn't try to mitigate the effects of excess steel capacity abroad. Rather, it's not clear that Section 232 is the way to go.

From Paletta and Dawsey in WaPo:

Defense Secretary Jim Mattis and Secretary of State Rex Tillerson privately warned senior trade officials on Tuesday that President Trump's proposed tariffs on steel and aluminum could endanger the U.S. national security relationship with allies, according to five people familiar with the meeting.

This article was written by

Econbrowser profile picture
James D. Hamilton has been a professor in the Economics Department at the University of California at San Diego since 1992. He served as department chair from 1999-2002, and has also taught at Harvard University and the University of Virginia. He received a Ph.D. in economics from the University of California at Berkeley in 1983. Professor Hamilton has published articles on a wide range of topics including econometrics, business cycles, monetary policy, and energy markets. His graduate textbook on time series analysis has over 14,000 scholarly citations and has been translated into Chinese, Japanese, and Italian. Academic honors include election as a Fellow of the Econometric Society and Research Associate with the National Bureau of Economic Research. He has been a visiting scholar at the Federal Reserve Board in Washington, DC, as well as the Federal Reserve Banks of Atlanta, Boston, New York, Richmond, and San Francisco. He has also been a consultant for the National Academy of Sciences, Commodity Futures Trading Commission and the European Central Bank and has testified before the United States Congress. _________________________________________________ Menzie D. Chinn is Professor of Public Affairs and Economics at the University of Wisconsin’s Robert M. La Follette School of Public Affairs. His research is focused on international finance and macroeconomics. He is currently a co-editor of the Journal of International Money and Finance, and an associate editor of the Journal of Money, Credit and Banking, and was formerly an associate editor at the Journal of International Economics and the Review of International Economics. In 2000-2001, Professor Chinn served as Senior Staff Economist for International Finance on the President’s Council of Economic Advisers. He is currently a Research Fellow in the International Finance and Macroeconomics Program of the National Bureau of Economic Research, and has been a visiting scholar at the International Monetary Fund, the Congressional Budget Office, the Federal Reserve Board and the European Central Bank. He currently serves on the CBO Panel of Economic Advisers. With Jeffry Frieden, he is coauthor of Lost Decades: The Making of America’s Debt Crisis and the Long Recovery (2011, W.W. Norton). He is also a contributor to Econbrowser, a weblog on macroeconomic issues. Prior to his appointment at the University of Wisconsin–Madison in 2003, Professor Chinn taught at the University of California, Santa Cruz. He received his doctorate in Economics from the University of California, Berkeley, and his AB from Harvard University.

Recommended For You

Comments (1)

Pompano Frog profile picture
Dear Reader..

Only a professor could come up with such an analysis.

Companies that need to borrow need to have an EBITDA return on revenue of at least 8% over an economic cycle. EBITDA is earnings before interest taxes and depreciation.

Steel companies are earning little at existing prices. U.S. steel has $12 billion in current revenue.

The net earnings estimates for 2019..2019 are $4.25 per share. There are 176 million shares outstanding. That is a profit after tax of $748 million.

To keep U.S. steel under American control costs under $1 billion in additional costs. But, that does not count the benefits from more jobs, more capital expenditures and more profits..for Americans.

If subsidizing steel is such a bad idea why does China, Singapore, Japan, Taiwan and South Korea spend so much in their precious resources in this task? That should be your main thought on this issue.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
Invesco DB Base Metals Fund ETF
iPath Dow Jones-UBS Aluminum Total Return Sub-IndexS ETN
DB Base Metals Double Short ETN
DB Base Metals Double Long ETN
iPath Pure Beta Aluminum ETN

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.